This week, the Legislature approved a restructured Managed Care Organization (MCO) tax package, which was subsequently signed by Governor Brown. The MCO tax reform package will allow California to continue to draw down federal funds for Medi-Cal and avoid a potential $1.1 billion deficit in the State Budget.

The MCO tax package includes: Assembly Bill x2 1 (Bonta), Senate Bill x2 2 (Hernández), and Assembly Bill 133 (Committee on Budget). AB x2 1 is of specific importance to RCRC Member counties because it prohibits the Department of Health Care Services from retroactively recouping provider rate reductions for Distinct Part/Skilled Nursing Facilities (DP/SNFs), as required by Assembly Bill 97, for dates of service between June 1, 2011 and September 30, 2013. AB 97 was enacted by the Legislature as part of the 2011 State Budget Package and cut rates to a variety of Medi-Cal providers, including DP/SNFs, pharmacies, and other fee-for-service Medi-Cal activities by 10 percent from the 2008 reimbursement level.

RCRC staff has long-advocated that DP/SNFs are appropriately reimbursed for serving the Medi-Cal population, especially those in rural and underserved areas. The MCO Tax package addresses this long-time issue and prevents the State from collecting retroactive rate cuts from more than 50 facilities state wide, many of which are located in RCRC member counties.

The Department of Water Resources has issued a draft Groundwater Sustainability Plan (GSP) Emergency Regulations guide. The purpose of the guide is to provide information essential to understanding the Draft GSP Emergency Regulations.

Written for local agencies and interested parties, the guide walks the reader through four general phases of the draft regulations beginning with the formation of groundwater sustainability agencies (GSAs) and leading up to implementation of an adopted and State approved GSP or alternative to GSP. The draft guide will be revised to reflect the Final GSP Emergency Regulations. The comment period ends March 25, 2016. The guide can be accessed here.

On February 10, 2016, the Office of Administrative Law issued a Notice of Approval of Regulatory Action for the Department of Fish and Wildlife's (DFW) proposed dreissenid (also known as Quagga) mussel regulations. These new regulations developed under the authority of Fish and Game will become effective April 1, 2016.

The regulations provide the DFW the authority to verify that efforts are taking place to prevent and control dreissenid mussels throughout the state, provide a process to impound conveyances which may be carrying dreissenid mussels, and enable a permitting process for the possession of dead dreissenid mussels.

Detailed information on the DFW mussel regulations can be accessed here.

Last week, Rep. Jared Huffman (D-CA) and Rep. Dana Rohrabacher (R-CA) introduced H.R. 4615, a measure that would exempt water efficiency rebates from federal taxes. The legislation would also exclude water efficiency home improvements and stormwater management related upgrades from taxes.

Although the state of California provides a tax exemption for rebates from removing thirsty turf from lawns, the federal tax code does not. Participants who received more than $600 in rebates are being issued 1099 forms from local water utilities to count the rebate as taxable income. Other cosponsors of H.R. 4615 include California Reps. Ami Bera, Brad Sherman, Jim Costa, and Mike Thompson.

After reintroducing legislation (S 2533) to respond to California’s continuing drought, Sen. Dianne Feinstein (D-CA) grilled an Obama administration official this week at a hearing on the proposed budget for the Bureau of Reclamation about the seeming reluctance to help alleviate the drought.

Senator Feinstein asked Reclamation Commissioner Estevan Lopez why the administration had not asked for additional funds this year to augment the $100 million she secured last year for federal drought assistance. Lopez had to defend his agency’s decisions to reduce pumping when central and southern California water users would benefit from increased winter flows. Senator Feinstein argued for more funding to improve data about pumping while protecting the endangered Delta smelt and to complete studies for the projected Sites and Los Vaqueros reservoirs. “My constituents are also the President’s constituents,” Feinstein told Lopez. “I’m really frustrated that the administration seems unwilling to help me do something about this drought.”

This week, Rep. Randy Hultgren (R-IL) and Rep. Dutch Ruppersberger (D-MD) announced the creation of the Municipal Finance Caucus to discuss the opportunities and challenges for states and local governments to fund initiatives that will strengthen their communities, and to advocate for bipartisan policies that enhance their access to the capital markets.

Key issues for the caucus include: protecting the tax exempt status of municipal bonds, understanding how financial regulations treat municipal debt, and ensuring there is a robust market for municipal securities. Last year, Rep. Hultgren and Rep. Ruppersberger sent a letter to House leadership expressing support for the tax exemption on municipal bonds which was also signed by more than 120 other House members.

Drought Mortality Amendments, 2015: Extends until December 2018 various exemptions to the forest practice rules allowing for the removal of dead, dying, and diseased trees due to the drought. Agency: California Board of Forestry and Fire Protection Status: Draft released for public review, comments due by 5 p.m. on March 28, 2016. Hearing set for April 6, 2016. Proposed regulatory language and related documents can be accessed here. RCRC Comments: RCRC is seeking member county input. RCRC Advocate: Staci Heaton sheaton@rcrcnet.org

Revised Proposal to Update CEQA Guidelines regarding Analysis of Transportation Impacts: Senate Bill 743 (Steinberg; 2013) required an initial draft of changes be developed to the California Environmental Quality Act (CEQA) regarding the analysis of transportation impacts by the summer of 2014. This revised proposal reflects input received on that preliminary discussion draft. Agency: The Governor’s Office of Planning and Research (OPR) Status: Draft language released January 20, 2016 with comments due February 29, 2016. RCRC comments: RCRC’s comment letter can be accessed here. A copy of the revised proposal can be accessed here. RCRC Advocate: Mary Pitto mpitto@rcrcnet.org

Proposed Changes to the CDBG Regulations: The proposed changes to current Community Development Block Grant (CDBG) Regulations will include additional language to allow special allocations of funding for use in mitigating disasters and disaster recovery. Agency: The Department of Housing and Community Development (HCD) Status: The proposed language was released January 22, 2016, public comment due March 8, 2016. RCRC comments: Staff is seeking input from member counties. A copy of the proposal and additional information can be accessed here. RCRC Advocate: Mary Pitto mpitto@rcrcnet.org